Simon Ricketts.

The Chair: Good morning, and welcome to this meeting of the House of Lords Built Environment Committee. This is our third evidence session on our short inquiry into the Government’s proposal for a policy relating to the grey belt. Today we welcome Simon Ricketts, who is a partner at Town Legal. My name is Daniel Moylan and I chair the committee. I am not going to introduce other members of the committee now, but I will call their name as they ask a question. They all have name plates in front of them, in any event, so that you can see who we are, Mr. Ricketts. I think you can also clearly see the two members who are joining us remotely.

Q29 Lord Mair: Good morning. We are very pleased to have you help us on the role of the legal system on this whole question of planning and the grey belt. What do you think about the proposed definition of the grey belt? Is it applicable in practice? How precise is the term “limited contribution”, and can that be legally defined?

Simon Ricketts: My answer is yes. I am more positive than many who have commented on this. I say that, because we are looking at this primarily through the eyes of a position where an application is made for inappropriate developments in the green belt. At the moment, very special circumstances have to be shown, which is the test that is generally stated but well understood in practice. The proposal is actually pretty nuanced.

Perhaps I may go through the constituent parts. There are six elements and checks on what amounts to grey belt within the definition of grey belt itself: for a start, we have the limited contribution to the five green-belt purposes; secondly, we have the exclusion of land designated for various environmental reasons—a reference to what is known as footnote 7; the land must be in a sustainable development—the third check; the development must not fundamentally undermine the function of the green belt across the area of the plan as a whole—the fourth check; fifthly, there has to be a demonstrable need for additional housing or, in the case of non-residential development, whatever the other form of development may be; lastly, the series of tests in paragraph 155, which are the so-called golden rules, need to be achieved, including 50 per cent affordable housing, if that is viable.

So, to my mind, it is quite a constrained test. It is no less vague than the “very special circumstances” test. If all those criteria are met, in many cases an applicant might think that it was approaching a position whereby it would succeed under the very special circumstances test in any event.

Q30 Lord Mair: We have heard quite a number of witnesses express a fear that the term “limited contribution” would just lead to endless disputes with lawyers. As a lawyer, are you disagreeing with that?

Simon Ricketts: Yes, I am. I strongly disagree with that, because policy is replete with generally stated tests. That is the way in which the planning system works and planning policy is framed: “very special circumstances”, “substantial harm” to a heritage asset, or “less than substantial harm”. These tests are throughout the NPPF and other documents. People always worry that these issues will then get caught up in litigation. They are not, because the approach of the courts is straightforward. Words have their common-sense meaning. It is for decision-makers to apply policy and for the courts to interpret it in the case of real ambiguity.

We have seen from cases about “very special circumstances” that the courts have pushed back on people trying to overengineer this. They say that the meaning of “very special circumstances” is for the decision-maker. It is a classic exercise of planning judgment. A particular mathematical exercise is not required. There is a conflation between, “It’s going to end up in the courts all the time”, and “there’ll be a lot of planning appeals”.

The introduction of grey belt as a designation may well lead to more planning by appeal, because, in a way, that is inherent in what the Government are proposing. It is a more centralised, top-down approach to requiring authorities to look more positively than perhaps traditionally they would like to on development in green belt areas. Many applicants will take the view that their sites meet these criteria. Authorities and their constituents may take a different view, so it will go to appeal on many cases, and it will be for the inspectors of the Planning Inspectorate and for the Secretary of State to start to set the tone as to what amounts to a limited contribution.

Q31 Baroness Andrews: We are aware of the fact that you are a lawyer. It is interesting what you have just said: that the Government’s intention might actually be to encourage by appeal what we are used to. Do you want to say anything more about that? I note that you say that it will be the job of the court to define limited contribution. I think that is what you said. My further questions will be about anything else that needs to be done or could be done to the definition itself.

Simon Ricketts: To push back slightly, I am not saying that it would be for the courts to define “limited contribution”. The courts will quickly say that it is for decision-makers to decide in a particular case how limited or otherwise they consider the contribution to be that the land makes to the green belt. I would not say that the Government are encouraging planning by appeal at all.

The central thrust is and should always be that local authorities should have local plans in place that should meet local housing needs and needs for other forms of development. However, the reality is that we do not have up-to-date plans in place. I have little confidence that they will rapidly be put in place, so there has to be a safeguard if local housing and other needs are to be met. Therefore, the Government have taken the view that there needs to be the opportunity for applicants to bring forward proposals in areas where there is an unmet housing need on appropriate parts of the green belt and with a slightly lower test than the very special circumstances test.

That is all this is. In a way, it is very clever way of starting to look into whether it is possible to reform this concept of green belt, which has become politically toxic when it comes to the potential for any change at all. So I see it as a relatively nuanced change.

Q32 The Chair: You said earlier that a developer or an applicant who met all the tests set out in the definition of grey belt would probably believe that he had practically met the test for very special circumstances. So is this merely a duplicative complexity that changes very little? Would the Government be better advised to stick with the very special circumstances test, which planners appear to think they understand, and simply tweak it into “not quite very special circumstances” or something like that? How would you advise the Government on that, because we will be offering advice to the Government?

Simon Ricketts: My advice to the Government would be that it is sensible to give a definition along the lines that they propose to certain categories of development on certain types of land where there should be a different, less restrictive test than the very special circumstances test. Although the very special circumstances test is commonly understood, it is wholly uncertain in practice, because you make your case as to what you believe as the applicant your very special circumstances are. The weight that is attached to each of the circumstances you put forward is for the decision-maker. You really have no idea what the outcome is going to be. Here, we begin to have some criteria set out—the six that I mentioned.

I am not saying that there should be no changes to the definition which the Government have proposed. I have four suggested changes, if it would be helpful for me to indicate what they are.

Baroness Andrews: Yes, please.

Q33 The Chair: I think Baroness Andrews was just about to ask you that question. Let us not ask her to repeat it but instead allow you to tell us what specific changes you would make to the definition. Can you briefly state them?

Simon Ricketts: Number one is that the definition in the glossary starts with some clumsy language. It says, “Previously Developed Land and any other parcels and/or areas of Green Belt land that make a limited contribution to the five Green Belt purposes”. In my view, it should just say, “areas of green belt that make a limited contribution to the five green-belt purposes”.

The Chair: Do you think that “previously developed land” is covered by the expression “makes a limited contribution”? Do you understand my question? It reads as though it means previously developed land, irrespective of its contribution and without reference to its contribution, and other land that makes a limited contribution.

Simon Ricketts: I think it is confused. Your question points very well at that confusion. What the Government intended and intend is that there is a sequential approach: that before considering grey-belt land, you rule out opportunities on brownfield land within the green belt. That is not clear with this wording, which is why I say that it would be better just to say, “any green-belt land”.

My second point is that there is confusion between the definition in the glossary and the expanded definition in the consultation paper that was published alongside the draft NPPF. The consultation document wording is too restrictive, because it suggests that the site should not perform strongly against any green-belt purpose. Then it sets other criteria that largely duplicate the green-belt purposes. In my view, we should have a simple definition in the glossary.

The role of planning practice guidance sitting alongside the NPPF is to give examples of the factors that should be taken into account by a decision-maker in determining whether there is a limited contribution. That would include a couple of the elements mentioned in the consultation document, such as whether the land is fully enclosed by built form and whether it is dominated by urban land uses. There could be others, such as whether, with the release of the land, there would still be a defensible long-term green-belt boundary. So my second change would be to clarify the role of the expanded definition in the PPG.

The third change I would suggest is the criterion that the development must not fundamentally undermine the function of the green belt across the area of the plan as a whole. In my view, it is confusing to say, “across the plan as a whole”, because that is the local authority's plan. You should be looking at whether it undermines the function of the green belt as a whole, which may straddle two local authority areas.

Finally, excluding all land that is identified as protected in footnote 7 needs some care, because it includes various categories of land that perhaps should not be ruled out in principle from being considered to be grey belt. In particular, it would be odd if local green space ended up having tighter protection than green belt. Areas at risk of flooding are very problematic at the moment, because the planning practice guidance includes any land where there is a risk of surface water flooding as being caught, which would rule out many areas that would otherwise be appropriate for development.

Q34 Lord Mawson: Good morning. To what extent will the proposed changes affect the likelihood of legal challenges to local authority planning decisions? What is the impact of the cost and time delay when a planning application has to go to appeal? How long can it take to obtain legal clarity of planning terminology, and is definitive legal clarity ever achieved in practice?

Simon Ricketts: I will not repeat some of what I have said already, but if the local authority decides to refuse planning permission, the remedy for the applicant is to appeal to the Planning Inspectorate. At the moment, assuming that these are relatively substantial developments that would go by way of a public inquiry, the Planning Inspectorate’s statistics show that it is currently taking an average of 31 weeks to determine a planning inquiry.

The costs for appellants and local authorities in going to appeal are significant, but we are talking about proposals that would otherwise be promoted on the very special circumstances test and may go to appeal in any event.

If the local authority decides to grant planning permission and decides that this is grey belt, that there is no need for the very special circumstances test, that all the other criteria apply, and a third party—a local resident, a campaign group—decides to challenge the position, then, yes, it can end up in the court.

Part of the challenge may be that the local authority has been irrational in the way in which it has approached the application of the grey-belt test. Perhaps it has misdirected itself as to what “limited contribution” means, or it has not realised that one of the other constraints applies. However, as I have said previously, the joy of using simple expressions such as “limited contribution” is that it should be possible to apply that test pretty straightforwardly and not go wrong.

So, yes, there is a risk of going to court if a planning application is refused, if there is an appeal process, if planning permission is granted. As I have already said, I do not really see an endless series of court cases where we arrive at different formulations of what “limited contribution” means.

Finally, on this point, this may be odd for a lawyer to say, but as a country we are getting far too legalistic. The 1955 circular that formalised green-belt policy in this country ran to three pages without consultation. It used the phrase “very special circumstances” and set out most of the purposes for the green belt without consultation. We have lived with it, so we should not angst too much or we will end up with a much more complicated definition that brings its own problems.

Q35 Viscount Hanworth: The Government have proposed a 50 per cent affordable housing target on grey belt sites. Is the current approach to viability assessments, et cetera, able to deliver this? If not, why not?

Simon Ricketts: This is the problematic aspect of the proposals. First, my understanding is that there is no evidence that 50 per cent is likely to be generally achievable across the country. We will be in a position where many proposals will be made on the basis of viability appraisals seeking to show that the scheme cannot go ahead with 50 per cent. It will have to be a lower proportion of affordable housing. First, that is time consuming for all involved. Secondly, it gives the public the wrong impression that promoters are breaking or bending the rules, when the reality is that the bar has been set too high.

Under the methodology for arriving at a viability appraisal, the cost of the land needs to be included in that appraisal, and that is known as the benchmark land value. The Government in the proposals are considering capping that in relation to green belt development. The maximum increase in existing use value, which can be included as the benchmark land value, and the work in the consultation paper, are not fully concluded. They refer to number of academic papers, one of which suggests that the benchmark land value could be set at no more than three or four times the existing use value. Many people with direct experience of development and the land market will say that it will often take more than three or four times existing use value to persuade a reluctant landowner to sell their land.

So we are going to have a mismatch where, although the policy may be more liberal in bringing forward land within the green belt, if issues arise in terms of viability and the public perception that there needs to be anything approaching 50 per cent affordable housing, we will have problems. The 50 per cent affordable housing includes an appropriate amount of socially rented housing, but we have not been told what an appropriate amount is, and that is what really kills viability.

Q36 Viscount Hanworth: The benchmark land value is a can of worms that I do not want to penetrate. We have heard an assertion from one of our witnesses that we have a planning system that, “provides more consents than we build but has no power to deliver them”. That is a direct quote. On the other hand, we have just received a vivid and impassioned written submission that describes the impossibility of obtaining concessions to build from a nimby council intent on preserving its green spaces. That might seem to be a contradiction, but I can imagine that both circumstances prevail. Can you comment on this conundrum and suggest how it might be resolved?

Simon Ricketts: Could you repeat the first example?

Viscount Hanworth: The first assertion, in oral evidence, was that we have a planning system that, “provides more consents than we build but has no power to deliver them”. That implies that there is a plentiful supply of land. However, the written submission testifies to the great difficulty in getting any release of land from a nimby council. This was a small building enterprise that simply does not have the power or resources to undergo the legal processes necessary to contest the nimby council’s decisions.

Simon Ricketts: I am always very sceptical of extreme statements on either side. The truth is somewhere in the middle, unsurprisingly. To my mind, it is a complete canard that developers are regularly obtaining consents and sitting on the land. That has been debunked, in my view. There are many reasons why. Planning permissions take a huge amount of time and money to secure, and by the time they are secured the developer struggles to make the scheme viable, to make changes to the scheme, to bring it to market, or to discharge conditions. It is ducking the issue to say that the problem is not consenting but making developers build. That is not right.

Equally, it is easy to cast aspersions at local authorities, and I wish the word “nimby” would be banned from public discourse as unhelpful. Local authorities are elected by local residents who have grown up in areas or moved there because they love them. They want to protect them; that is a human instinct. But the role of the planning system has always been to balance public interests with private interests, and there is a pressing need to deliver more housing. That is why, on occasion, there has to be intervention by government on local authorities that do not plan in a timely way, and the ability to appeal to the Planning Inspectorate where local authorities refuse planning permission.

Viscount Hanworth: I was suggesting that the system discriminates in favour of large building firms that can afford to mount appeals. What I described as an impassioned submission came from something calling itself a small or medium-sized enterprise that seems to be in danger of going into liquidation because of the difficulties. Is that something you can testify to, or would you deny that?

Simon Ricketts: Yes, absolutely. There is an increasingly high entrance cost to participating in housing development—for many reasons, planning being one of them. It is very difficult for SMEs with smaller sites, which are sometimes as complicated and expensive to work through the system as much larger schemes.

Viscount Hanworth: Thank you. That enlightens the situation.

Q37 Baroness Warwick of Undercliffe: I will follow up on that and ask you a slightly different question. Can you comment on why it appears that so many Section 106 agreements do not deliver even on the developer’s original commitment? That seems to me to be one of the biggest gaps that we have in the present circumstances, and it would be interesting to know whether you thought that the grey-belt proposals would make a difference to that.

Do you think the proposals might create a risk of unintended outcomes? It has been suggested, for example, that local councils might designate additional land as local green space, or that people might degrade the quality of the land in the green belt to affect the likelihood of development. It would be helpful if you could comment on those, please.

Simon Ricketts: On the question of not delivering on Section 106 agreements, it is true that in some cases developers may sign up to Section 106 agreements hoping that, despite the costs of the obligations they are entering into, they can find a way to make the development viable, find they cannot and have to go back and try to renegotiate. Then, you have a stalled development.

There is also currently a huge issue in relation to the lack of registered providers—housing associations, basically—prepared to take the affordable housing element of housing schemes. That is causing a problem whereby market housing cannot be built out beyond a particular point because the developer cannot secure a registered provider to take the affordable housing.

I would push against the idea that developers are routinely breaching Section 106 agreements in any way. There may be cowboys out there who are doing that. I certainly do not see that from my perspective, but I do see a lot of attempts at renegotiating Section 106 agreements that, on reflection, are probably too onerous to allow the development to proceed.

On the risk of unintended outcomes, in particular whether people might degrade green-belt land to make it more appropriate for development, it is interesting that when the Government first floated the grey-belt proposal, they were talking about degraded land, petrol stations and that sort of thing. They have completely moved away from that now. Now, the focus is all on the extent to which the land meets the five green-belt purposes, none of which really engage with the quality of the land itself. So letting the land go to wrack and ruin will not get anyone anywhere.

Undoubtedly, with any proposal, there might be unintended outcomes and influences on behaviour that have not been thought through. In neighbourhood planning, we have to be careful not to find neighbourhood plans being brought forward that seek to designate land as local green space, for example, and therefore seek to remove it from the risk, as they might see it, of being identified as grey belt.

I do not see that as a significant risk, because the NPPF contains quite a restrictive definition in relation to local green space, and I would not see that as the sort of land that would normally fall within what is envisaged to be this grey-belt category.

Baroness Warwick of Undercliffe: So your advice to us would be to play that down as a likely outcome—

Simon Ricketts: Yes.

Baroness Warwick of Undercliffe: —amongst the many outcomes that people have predicted, when they predict the worst.

Simon Ricketts: Yes, it will be something completely different.

Q38 The Chair: Take an old abandoned industrial site inside the green belt. There could be strong arguments that a proper and effective use would be as a new industrial site. This policy is focused entirely on housing. Are you saying that you could still apply for that to be a new industrial site, but you would have to use the very special circumstances route to do so; grey belt simply would not apply to that?

Simon Ricketts: No. In fact, grey belt applies to commercial development as well as to residential development. It is a great problem with discussion about the planning system at the moment that everything is about housing. Allowing for logistics, industrial, life sciences and other development is just as important. The draft policy says that “housing, commercial and other development in the Green Belt should not be regarded as inappropriate where … “, and then sets out the criteria for grey belt that I have previously indicated.

There is a problem in that, if you are bringing forward housing development, it is easy to see whether there is an unmet housing need, because you apply the methodology that is in the public domain. However, in relation to commercial development, you have to show that “here is a demonstrable need for land to be released for development of local, regional or national importance”. There is no real guidance as to what the methodology would be for demonstrating that.

The Chair: That is under the very special circumstances test, or under the grey-belt test.

Simon Ricketts: Under the grey-belt test, if you consider that there is an unmet need for logistics development in your area and there is a piece of green belt that you consider to be grey belt because it makes a limited contribution to the purposes of the green belt, you can apply for planning permission if you can show that there is a demonstrable need for that land to be released for that form of development. That is inevitably more complicated than when you are dealing with housing development, because you will need to arrive at the right methodology.

The Chair: But it would be doable.

Simon Ricketts: Yes, absolutely.

The Chair: So it is perfectly possible that the grey-belt route could be used for non-housing development.

Simon Ricketts: Yes.

The Chair: A logistics centre might be an example. I am making a case here, but there is a demonstrable need for logistics centres of a modern character, especially where loads can be broken down into smaller lorries and be more environmentally friendly. A particular site that makes a limited contribution to the green belt is ideal, because it is next to a main road as opposed to two miles into the jungle, so to speak, and so on. You can see how an argument for a logistics centre might well be constructed using and applied for under green-belt criteria. That would be possible.

Simon Ricketts: Yes, and they have a particular problem, as local plans do not adequately allocate land for logistics development, particularly where that development serves a regional or national lead. At the moment, quite a few applications come forward seeking to demonstrate very special circumstances. There were some high-profile decision letters from the previous Secretary of State over the last few years where planning permission was granted for very large warehousing, industrial and logistics schemes on the basis of very special circumstances, but those processes had very uncertain outcomes for all involved. If the grey-belt proposal makes the outcome more predictable to a degree, that might be useful, but it will not be perfect.

Baroness Warwick of Undercliffe: Would that not of itself in any case generate demand for additional housing? Simon Ricketts: Yes.[1]

Baroness Warwick of Undercliffe: Would that need to be taken into account in that part of the planning process, or would it be seen as additional and a problem for the local authority?

The Chair: If I may say, this is a planning issue that arises all the time on every significant development: what are the consequential effects of that, and should they be considered as part of the planning application? It would not necessarily create a demand for extra housing if it was in an area of low employment.

Baroness Warwick of Undercliffe: That is true.

Simon Ricketts: Perhaps I could take this opportunity to build on that point by putting the boot into the idea that the green-belt policy is at all fit for the modern-day world. As well as creating these urban containment zones, which are the green belt, the 1955 circular, which was the foundation of green-belt policy, contained a policy statement that “every effort should be made to prevent any further building for industrial or commercial purposes” within the urban areas to be surrounded by the green belt, because that “would create a need for the development of additional land for housing”. We were in a different world when the green-belt concept was formulated.

The Chair: Yes. It was a world in which government could decide that industrial development would all take place in Northumberland and, therefore, that is what business would do. Of course, business did not do it necessarily. It was a much more planned economy, and the planning system for land fitted into that. Thank you very much indeed for your valuable contribution.

[1] Mr Ricketts believes that he misspoke at this point and would prefer this initial response to be discounted, in favour of his full answer below.